Ten Ways to Boost Marketing Efficiency (Without More Spending)

by Carol Phillips
President, BrandAmplitude, LLC

Every marketer, whether they spend $200,000 or $200 million, believes that they have limited marketing funds. Whatever the budget, the need for increased efficiency or Marketing ROI, is paramount. It is our belief that at least 10% of most marketing budgets is wasted by poor strategy, planning or execution. Here are ten of the most common efficiency mistakes and how to address them.

1. Improve Target Definition

Direct marketers know the importance of targeting-- studies show that targeting accuracy explains 50% or more of the effectiveness of a mailing. Some waste is inevitable but more precision provides an immediate lift in rate of return for any program. Typically, a media target should be more quantifiable and narrower than a marketing or positioning target. It should take into account specific behavioral actions such as heaviness of use, use of related products, number of visits, etc. as well as demographic criteria. Warranty card and customer service databases can be a gold mine for identifying these types of characteristics. If you do not have a database, the data may be easier to come by than you think...for example retail and trade partners often know a lot about your customer because they keep transaction records. Media content can be a great way to get more focused in your targeting, especially for B2B marketers. Magazines and online media are finely honed to specific interest groups. Even radio and TV can be targeted to complement your target's interests from home improvement, to finance to sports. Online focus groups (www.artafact.com) can be an inexpensive way to get additional target insights -- without ever leaving your office.

2. Expand to additional media types

If more than half of your marketing dollars are concentrated in one medium, you need to diversify. Customers do not limit their media consumption to one media -- and neither should you. In fact, recent studies show that they often "multi-task" with more than one medium at time. Weaving together a program that presents your message in different ways in different media environments can provide a tangible boost in visibility and effectiveness. Whenever possible, cross media programs should linked -- for example, use print media to drive customers to a web site or "landing page" for more information, or use radio to drive traffic to a store event.

3. Experiment with direct response media

If your idea of direct response is "junk mail" and tedious infomercials, think again. Direct response now includes sophisticated long format commercials, online e-mail, banner or search engine campaigns and more. Sales promotion and direct response now make up nearly 50% of total marketing dollars. If you do not currently have a web site or 800 number on your advertising, you may be missing out on one of the most powerful ways to connect with customers -- and evaluate the effectiveness of your marketing program. Using direct response media offers a strong secondary benefit - acquisition of prospect names. These names represent "warm leads" and are extremely valuable for follow-on marketing. Whenever possible, gather e-mail addresses (and "opt in" permission to contact) in order to expedite re-contact and reduce cost of follow up.

4. Leverage media merchandising opportunities

Most media companies today offer more than one media type and often several. For that reason, cross media buys are becoming the norm. They offer media companies a way to expand their offering to advertisers and provide cost efficiencies to their customers. Be sure to ask your media buying firm their strategy for leveraging media credits or bonus programs. Letting them know what would be of greatest value to you will help them to drive the best deal. Typical merchandising programs include promotional merchandise, tickets to entertainment or sporting events, web site visibility, access to databases, trade show tie-ins or exhibits, show homes, in-store events and more. These extras can amount to 10% or more of the value of the media buy and can provide important incentives for trade partners and sale forces.

5. Create and mine a database of customers and prospects

Building and analyzing a customer database is a good marketing investment. Customer service databases, warranty databases, billing databases and others can be a good place to start building a marketing database. By communicating with these customers and prospects via e-mail, mail and phone, additional data on product ownership, use, interests can be gathered and used to create powerful programs for both retaining existing customers and acquiring new ones. Analytical experts like Benchmarketing Analytics (www.benchmktg.com) can combine your customer data with data from outside databases (match on phone number or address ) to create profiles and models the results of proposed programs. These models are used extensively in financial services and other industries to enhance targeting effectiveness. One example of the use of a customer database is viral marketing. Existing customers are given incentives to promote your brand to people they know. Viral marketing programs can be inexpensive to administer, yet offer a high rate of return. They have the added benefit of enhancing the loyalty of existing customers by turning them into "brand ambassadors".

6. Establish multiple performance metrics

Wondering which part of your marketing budget isn't working is a thing of the past. Most sophisticated marketers pilot their programs online via focus groups or with a test e-mail offer. Different offers can be tested or the same offer with different target criteria. Once in the market, multiple 800 numbers can be used to track the effectiveness of different media, targets or offers.

Other performance metrics include:

Retailer sales panels
Email inquiries
800 call volumes
Unique web site visitors
"Click through" rates

7. Time buys to the marketplace

Buying media by the pound ("number of eyeballs") is a mistake. Different media, different times of day or even positioning within media (page or pod position) carry different prices for a reason. Often it is more worthwhile to pay a bit more because the quality of customer attention is greater.

Here are some factors to consider when buying media:

Is your product usually purchased at night or during the day? On the weekend or weekday?
Can attention to the message be enhanced by delivering it within a particular context -say home improvement, or cooking or news?
When are people most receptive to thinking about your product? When they have the need or when they have the time?

8. Scale back creative needs

A common mistake is to create special creative for every insertion, web site, and promotion on the assumption that it is necessary to avoid "burning out" consumers with one or two creative executions. Fact is, creative development is costly and most creative is underused. You may be surprised how much more effective you can be with just one or two executions delivered to address a narrower target or target need. New online research tools can be an efficient way to evaluate the relevance of a message across different segments (www.artafact.com). Relevance has been shown over and over to outweigh entertainment in studies of advertising effectiveness. And the risk of overexposure to a narrow target is much less than the risk of underexposure to the majority of the target. Repetition works! Just ask any toddler.

9. Enhance the offer

A common error is to omit any offer. People will not go to their phone or computer unless there is a compelling reason. That reason needn't be a discount or "value". It has been demonstrated that "value added" offers such as information or a satisfying game or riddle can be just as effective in generating a response. Web sites offer many ways to incent consumers to learn more about your product. Experiment with various offers, then get the word out! If you do offer a discount or promotion, make sure it is a meaningful one. Customers won't waste their time on complex offers that aren't worth the effort. It is better to offer the CHANCE to win something meaningful than the opportunity to save a minor amount of money or time. Sweepstakes and instant entry programs also offer a chance to gather names for recontact. Be sure to leverage that opportunity to re-market to "warm prospects".

10. Target existing customers

It is a truism that it is easier to retain an existing customer than to get a new one. After all, they have already demonstrated a need for your product and interest in your brand or solution. Targeting existing customers poses a dilemma however -- why reward people who would buy you anyway and thus reduce margin on existing sales. The solution to this dilemma is customer segmentation. Not all customers are equally valuable. Highly valuable customers should not be rewarded just for buying again -- but can be rewarded for referring new customers. Occasional or one time customers may need extra stimulation to bring them solidly into the franchise.

Bonus Extra: Reduce Non-working costs

Agency expenses should never exceed 10% of media costs. For companies spending under $10 million on advertising and other communications, this probably means that it is not realistic to retain an agency year round as most national agencies require a minimum of $1 million in fees to support a client relationship. Most agency services can be accessed through specialized marketing services companies much less expensively than through a full service agency. This requires extra coordination on the part of the company, or the use of external consultants. Nevertheless, agency costs can be dramatically reduced by using project based services for media planning and buying, database analysis, communications strategy and other core agency activities.